20-12-07 Lenovo v. Nokia NDCA Complaint

Case 5:20-cv-08650 Document 1 Filed 12/07/20 Page 1 of 27
1 JOSEPH F. HAAG (SBN 248749) WILLIAM F. LEE (pro hac vice forthcoming)
WILMER CUTLER PICKERING RICHARD W. O’NEILL (pro hac vice pending)
2 HALE AND DORR LLP WILMER CUTLER PICKERING
2600 El Camino Real, Suite 400 HALE AND DORR LLP
3
Palo Alto, CA 94306 60 State Street
4 Telephone: (650) 858-6000 Boston, MA 02109
Facsimile: (650) 858-6100 Telephone: (617) 526-6000
5 Joseph.Haag@wilmerhale.com Facsimile: (617) 526-5000
William.Lee@wilmerhale.com
6 Richard.O’Neill@wilmerhale.com
7
Attorneys for Plaintiff
8 LENOVO (UNITED STATES) INC.
9 UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA
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SAN JOSE DIVISION
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LENOVO (UNITED STATES) INC.,
13 Case No.
Plaintiff,
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vs.
COMPLAINT
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NOKIA TECHNOLOGIES OY,
16 JURY TRIAL DEMANDED
Defendant.
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1 Plaintiff Lenovo (United States) Inc. (“Lenovo United States”), on personal knowledge as
2 to its own acts, and on information and belief as to all other acts based on its own and its
3 attorneys’ investigation, by and through its attorneys, alleges as follows:
4 INTRODUCTION
5 1. Defendant Nokia Technologies Oy (“Nokia Oy”) has asserted, and continues to
6 assert, that Lenovo United States is required to take a license to patents that Nokia Oy claims to
7 own and claims are essential to practice the H.264 video compression standard. However, with
8 respect to each of the nineteen patents discussed below (“Nokia Patents”), the prior owner (Nokia
9 Corporation) failed to comply with its contractual obligation to disclose any rights in the allegedly
10 essential Nokia Patents to the relevant standards-setting organization before the H.264 standard
11 was “frozen”—thus depriving members of the ability to take those alleged patent rights into
12 account when the standard was still under development.
13 2. Because this late disclosure breached the contract that existed between Nokia
14 Corporation and the H.264 standards-setting organization (and Lenovo United States is a third-
15 party beneficiary of that contract and has suffered harm as a result of the breach) and also violated
16 California unfair competition law, each of the Nokia Patents is unenforceable against the H.264
17 standard. Moreover, because this repeated late disclosure was egregious, and because Nokia Oy
18 and/or Nokia Corporation have leveraged the allegedly standard-essential nature of the late-
19 disclosed Nokia Patents to obtain unjust benefits, the Nokia Patents are unenforceable against the
20 H.264 standard under the doctrine of implied waiver.
21 PARTIES
22 3. Plaintiff Lenovo United States is a company organized under the laws of Delaware,
23 with its principal place of business at 8001 Development Drive, Morrisville, North Carolina
24 27560.
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1 4. On information and belief, Defendant Nokia Oy is a Finnish corporation that is
2 headquartered in and does business in Sunnyvale, California.1 Nokia Oy claims to own by

3 assignment all right, title, and interest in and to the Nokia Patents.
4 5. On information and belief, Defendant Nokia Oy is a wholly owned subsidiary of
5 Nokia Corporation. Defendant Nokia Oy’s primary business is to monetize the patent rights
6 obtained by the various Nokia entities, including Nokia Corporation.
7 JURISDICTION AND VENUE
8 6. Lenovo United States brings this action under 28 U.S.C. § 2201, federal patent law,
9 California contract law, and the California Unfair Competition Law (“UCL”), Business and
10 Professions Code §§ 17200 et seq.
11 7. The Court has original jurisdiction over Lenovo United States’ claims pursuant to 28
12 U.S.C. § 1332 because Lenovo United States is a citizen of Delaware and North Carolina, Nokia
13 Oy is a citizen of Finland and California, and the value of the matter in controversy (including,
14 among other things, Nokia Oy’s demand for Lenovo United States to take a license to its patents
15 that allegedly cover the H.264 standard) exceeds $75,000.
16 8. The Court also has subject matter jurisdiction under 28 U.S.C. § 2201 over Lenovo
17 United States’ request that the Court declare the Nokia Patents unenforceable in relation to the
18 H.264 standard under U.S. patent law.
19
20
1
See Nokia Bell Labs, https://web.archive.org/web/20201024004255/https://www.bell-
21
labs.com/connect/global-locations/sunnyvale-ca/ (as of October 24, 2020, last visited December 7,
22 2020) (“Nokia opened the Sunnyvale site in December 2010. This location is home to Nokia Bell
Labs, Nokia Technologies, Mobile and Fixed Networks.”) (emphases added); see also Internet
23 Archive, Nokia Corporation Website, Nokia Technologies,
https://web.archive.org/web/20170301164948/https://www.nokia.com/en_int/about-us/who-we-
24 are/our-businesses/nokia-technologies (as of March 1, 2017; last visited December 7, 2020) (“our
headquarters in Sunnyvale, CA”); Chris O’Brien, Nokia Technologies President on the Future of
25
His ‘Startup’: ‘Anything Is Possible,’ Venturebeat, http://venturebeat.com/2016/08/22/nokia-
26 technologies-president-on-the-future-of-his-startup-anything-is-possible/ (last visited December 7,
2020) (describing Nokia Technologies as “[b]ased in Sunnyvale” and “based in Silicon Valley”);
27 Dkt. 53 [Ans. to First Am. Compl.] ¶ 4, Nokia Techs. Oy v. Lenovo (United States) Inc. et al., No.
5:19-cv-427-BO (E.D. N.C. June 29, 2020) (“Nokia [Technologies Oy] admits that it does
28 business in Sunnyvale, California.”).
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Case No. COMPLAINT
1 9. The Court also has supplemental jurisdiction under 28 U.S.C. § 1367 over Lenovo
2 United States’ state law breach of contract and unfair competition claims because those claims
3 form part of the same case or controversy as the federal law claims.
4 10. The Court has personal jurisdiction over Nokia Oy on the basis of Nokia Oy’s
5 continuous and systematic contacts with the state of California, including because Nokia Oy
6 maintains a place of business in Sunnyvale, California, and conducts business there as well. See
7 supra n.1.
8 11. Venue in this district is proper under 28 U.S.C. § 1391(c)(2) because Nokia Oy is
9 subject to the Court’s personal jurisdiction as explained above.
10 INDUSTRY TECHNICAL STANDARDS
11 12. Industry technical standards are sets of technical guidelines and protocols that
12 enable a product produced by one manufacturer to interoperate with products produced by other
13 manufacturers that support the same standard. Standards are developed and released by industry
14 groups called standard setting organizations (or SSOs).
15 13. During standardization, industry participants in the SSO propose ideas for inclusion
16 in the standard. The SSO collectively considers proposals and then chooses which proposals to
17 adopt into the standard, either as proposed or with modifications from other participants. The
18 standard is then adopted (or “frozen”) and published for use by product suppliers.
19 14. The promulgation of standards can help increase competition among suppliers and
20 lead to improved products for consumers. Absent appropriate rules and adherence thereto,
21 however, standards also can lead to anticompetitive abuses, particularly when participants in the
22 standardization process have patent rights relating to technology being proposed for the standard.
23 Before standardization, suppliers of various technologies compete with other suppliers that offer
24 similar functionality, and the royalties a patent owner can demand for its technology is constrained
25 by the value of the patented technology standing alone and the availability of alternative technical
26 approaches to perform the functionality claimed in the patent. Post-standardization, however,
27 former alternatives to perform the standardized functions are often no longer viable substitutes for
28 those practicing the standard and thus no longer constrain royalties relating to standardized
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1 technology. As a result, a patent holder may demand royalties attributable to inclusion of the
2 patented technology in the standard rather than the actual value of the patented technology.
3 15. The danger that a patent holder will gain an arbitrary and unfair advantage in
4 demanding royalties is particularly high when an SSO standardization participant proposes ideas
5 to be included in the standard that are identical or similar to the ideas the participant separately
6 seeks to patent (or has already patented). Such a situation creates the risk that a participant will
7 intentionally push the SSO to adopt—unknowingly—the participant’s patented technology, even
8 though the SSO might have adopted a different technology or excluded the functionality from the
9 standard if the SSO was timely made aware that the patent-holding participant claims to have
10 patent rights covering the technology under consideration.
11 16. In response to this substantial risk of exploitative behavior, most SSOs have adopted
12 intellectual property rights (IPR) policies that seek to minimize the potential for this type of abuse.
13 Among other things, these IPR policies typically require participants to timely disclose any
14 alleged standard-essential patent rights (including rights in pending patent applications) that might
15 cover the technology that the SSO is considering for standardization. By requiring members to
16 declare any patent rights that, if adopted into the standard, might be essential to practice the
17 standard, members can evaluate alternative technical proposals, decide not to include the proposed
18 technology, and consider other potential implications of any patents that that might cover the
19 various proposals—all before the standard is frozen and before industry participants become
20 locked into implementing the standard in their products.
21 17. SSOs adopt such disclosure policies to promote the widespread use of their
22 standards by suppliers and consumers. Standards that are developed subject to a requirement of
23 full, timely disclosure of potentially essential patent rights ensure that the resulting standard is not
24 encumbered by patents that SSO members were unaware of during the standardization process.
25 THE H.264 STANDARD
26 18. This Complaint concerns nineteen patents that Nokia Oy and/or Nokia Corporation
27 have claimed are essential to practice the H.264 video compression standard.
28
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1 19. The H.264 standard was developed by the Joint Video Team (“JVT”), which is an
2 SSO composed of (1) the Motion Picture Experts Group (MPEG), which is the video subgroup of
3 the International Organization for Standardization/International Electrotechnical Commission
4 (“ISO/IEC”), and (2) the Video Coding Experts Group (“VCEG”), which is a subgroup of the
5 International Telecommunications Union (“ITU”). According to the ITU’s Term of Reference for
6 Joint Video Team (JVT) Activities, the JVT operated as a “joint group under the ordinary policies
7 and procedures of both organisations,” and committed to working in compliance with the IPR
8 policies, reporting requirements, and procedures of the ITU and the ISO/IEC.2
9 20. Early development of the H.264 standard was performed by the ITU’s VCEG, and
10 the JVT was created in 2001 to finalize it. The first version of the H.264 standard was frozen and
11 then published in May 2003. Subsequent editions were published in March 2005, November
12 2007, and approximately annually thereafter.
13 21. According to the ITU, H.264 “represents an evolution of the existing video coding
14 standards” and “was developed in response to the growing need for higher compression of moving
15 pictures for various applications such as videoconferencing, digital storage media, television
16 broadcasting, Internet streaming, and communication.”3
17 DISCLOSURE OBLIGATIONS UNDER THE ITU’S PATENT POLICY
18 22. At all times relevant to these allegations, Nokia Corporation was a member of the
19 ITU-T4 and actively participated in developing the H.264 standard, including by attending
20 meetings and making technical proposals for certain aspects of the H.264 standard. As a result,
21 Nokia Corporation was bound by the ITU’s Patent Policy (now known as the Common Patent
22
23 2
ITU, “Terms of Reference for the Joint Video Team (JVT) Activities,”
https://www.itu.int/dms_pub/itu-t/oth/34/01/T34010000010001PDFE.pdf (last visited December
24 7, 2020).]
3
ITU-T, “Summary,” http://www.itu.int/dms_pubrec/itu-t/rec/h/T-REC-H.264-200901-
25
S!Cor1!SUM-HTM-E.htm (last visited December 7, 2020).]
26
4
The ITU-T is the sector of the ITU that focuses on standardization. The ITU-T “assembles
experts from around the world to develop international standards known as ITU-T
27 Recommendations, which act as defining elements of the global infrastructure of information and
communication technologies.” ITU, https://www.itu.int/en/join/Pages/default.aspx (last visited
28 December 7, 2020).
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Case No. COMPLAINT
1 Policy for the ITU-T/ITU-R/ISO/IEC). As assignee of the Nokia Patents, Nokia Oy is bound by
2 the contractual commitments that Nokia Corporation owed under the ITU Patent Policy, and also
3 stands in the shoes of Nokia Corporation with respect to any remedies arising from a breach or
4 other violation of those contractual commitments.5
5 23. The ITU Patent Policy in effect when Nokia Corporation began participating in
6 development of the H.264 standard states that “any ITU-T member organization putting forward a
7 standardization proposal should, from the outset, draw the attention of the [Telecommunication
8 Standardization Bureau (TSB)] to any known patent or to any known pending patent application,
9 either their own or of other organizations.”6
10 24. The ITU’s Guidelines for Implementation of the ITU Patent Policy state (1) “[t]he
11 term ‘from the outset’ as it appears in paragraph 1 of the TSB Patent Policy . . . implies that such
12 information should be disclosed as soon as possible, i.e. as soon as it is becoming clear that an
13 evolving draft Recommendation will, in fact, fully or partly include patented elements”;7 and (2)
14 “[a]ny ITU Member State or Sector Member organization aware of a patent held by itself or
15 others, which may fully or partly cover elements of the draft Recommendation(s) proposed for
16 approval, is requested to disclose such information to the TSB, in no case later than the date
17 scheduled for approval of the Recommendation(s).”8 According to the Guidelines’ statement of
18 purpose, “[t]he guidelines encourage the early disclosure and identification of patents that may
19 relate to Recommendations under development. In doing so, greater efficiency in standards
20 development is possible and potential patent rights problems can be avoided.”9
21 25. Despite its involvement in developing the H.264 standard, and despite being bound
22 by the ITU’s Patent Policy, Nokia Corporation repeatedly failed to disclose during development of
23 the H.264 standard that it had rights in the Nokia Patents that Nokia Corporation and/or Nokia Oy
24
5
Ex. 1 (ITU, “Guidelines for Implementation of the Common Patent Policy for ITU-T/ITU-
25
R/ISO/IEC” (April 23, 2012) Part 7.)
26
6
Ex. 2 (ITU, Guidelines for Implementation of the TSB Patent Policy (July 7, 1999), at 7
(Appendix I)).
27 7
Id. at 3 (Section 2.4).
8
Id. at 4 (Section 3.1).
28 9
Id. at 2 (Section 1).
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Case No. COMPLAINT
1 have since claimed are essential to practice the H.264 standard. Indeed, Nokia Corporation did
2 not notify the ITU (or the ISO/IEC) about any of the Nokia Patents until long after the first
3 iteration of the H.264 standard was frozen and then published in May 2003.
4 26. Upon information and belief, Nokia Corporation did so to induce JVT/ITU members
5 to incorporate technology into the H.264 standard that Nokia Oy now contends is covered by the
6 Nokia Patents—but without providing those members with the ability to consider those alleged
7 patent rights before the H.264 standard was frozen. If Nokia Corporation had timely disclosed its
8 rights in the Nokia Patents, as it was contractually required to do, the JVT/ITU could have, for
9 example, adopted one or more alternative technologies or declined to include the relevant
10 functionality in the final standard. By failing to disclose its rights in the Nokia Patents before the
11 H.264 standard was frozen, Nokia deprived members of the ability to consider those options.
12 27. Members of the ITU and other third-party beneficiaries of Nokia Corporation’s
13 obligations under the ITU Patent Policy reasonably expected Nokia Corporation to disclose its
14 known patents and patent applications at the outset of the standardization process, and not after
15 functionality allegedly covered by a patent or patent application was approved for incorporation
16 into the H.264 standard and/or after the H.264 standard was frozen. If Nokia Corporation held or
17 had applied for patents potentially essential to the H.264 standard, then under the binding
18 contractual rules of the ITU Patent Policy, Nokia Corporation was obligated to disclose those
19 patents from the outset, and at least before the H.264 standard was frozen.
20 28. Nokia Corporation did not submit a Patent Statement and Licensing Declaration to
21 the ITU specifically identifying any of the Nokia Patents (or the applications for those patents) as
22 allegedly essential to any specific aspect of the H.264 standard before the standard was frozen,
23 even though Nokia Corporation knew it possessed those patent rights during development of the
24 H.264 standard, as detailed below.
25 29. Indeed, Nokia Corporation did not disclose the existence of the Nokia Patents
26 (and/or applications for those patents) during the H.264 standard-setting process, even while
27 Nokia Corporation personnel (including named inventors of the asserted patents) participated in
28 the relevant working groups that adopted the same technology that Nokia Oy now claims is
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1 covered by the Nokia Patents, and even though participants at meetings were frequently reminded
2 of the Patent Policy and their contractual obligation to disclose potentially essential patent rights.
3 30. Under the ITU Patent Policy, Nokia Corporation had binding contractual
4 commitments with the ITU, with ITU members, and with other SSOs participating in the H.264
5 standard development, all for the benefit of the SSOs, their members, and any entity involved in
6 making, using, selling, offering for sale, and/or importing products that support the H.264
7 standard, including Lenovo United States. All these entities reasonably relied on the ITU’s rules,
8 including the ITU’s Patent Policy, in supplying products that support the H.264 standard.
9 31. Lenovo United States has invested significant time and resources in connection with
10 supplying products in reliance on the transparency of the ITU’s standard-setting process and the
11 requirement that H.264 participants comply with the ITU’s rules, including the ITU’s Patent
12 Policy requirement for members to timely disclose any patent rights that might be essential during
13 development of the H.264 standard.
14 32. Upon information and belief, Nokia Corporation’s failure to timely disclose its
15 rights in the Nokia Patents was intended to and did cause ITU members to incorporate technology
16 into the H.264 standard that Nokia Corporation and/or Nokia Oy have since claimed is covered by
17 the Nokia Patents, all without the benefit of having knowledge of those alleged patent rights
18 before the H.264 standard was frozen. Upon information and belief, had Nokia Corporation
19 timely disclosed its rights in the Nokia Patents, JVT/ITU members would have decided to adopt
20 an alternative technology to perform the relevant functionality or left the relevant technology out
21 of the H.264 standard. Nokia Corporation’s conduct therefore distorted and impaired the
22 standardization process in a manner that has harmed Lenovo United States and others, such that
23 the accused functionality would not have been included in the H.264 standard but for the lack of
24 timely disclosure.
25 33. This standards-setting misconduct is not an isolated incident, as Nokia Corporation
26 has a history of failing to disclose its allegedly essential patent rights to standards setting
27 organizations. As just one example, the Federal Circuit determined in Core Wireless Licensing
28 S.A.R.L. v. Apple Inc. that Nokia had a duty to disclose its allegedly essential patent rights before
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1 the relevant standard was frozen, and breached that contractual obligation by waiting years after
2 the standard was frozen to first do so. 899 F.3d 1356, 1368 (Fed. Cir. 2018).
3 THE ’576 PATENT
4 34. U.S. Patent No. 7,006,576 (“the ’576 patent”) is titled “Video Coding,” and names
5 Miska Hannuksela as inventor.
6 35. Upon information and belief, the ’576 patent is assigned to Nokia Oy.
7 36. As assignee of the ’576 patent, which was assigned to Nokia Corporation during the
8 development of the H.264 standard, Nokia Oy is successor-in-interest to Nokia Corporation’s
9 rights and obligations under the ’576 patent and to Nokia Corporation’s rights and obligations
10 arising under the ITU Patent Policy with respect to the ’576 patent.
11 37. The ’576 patent issued on February 28, 2006, from an application filed July 19,
12 2000, and claims priority to an application filed on July 19, 1999.
13 38. Upon information and belief, Nokia Oy contends that the ’576 patent is essential to
14 practice certain aspects of the H.264 standard.
15 39. Upon information and belief, Nokia Corporation and Nokia Oy did not disclose the
16 ’576 patent or its underlying application to the ITU as potentially essential to the H.264 standard
17 before the relevant provisions of the H.264 standard were frozen.
18 THE ’211 PATENT
19 40. U.S. Patent No. 6,711,211 (“the ’211 patent”) is titled “Method for Encoding and
20 Decoding Video Information, a Motion Compensated Video Encoder and a Corresponding
21 Decoder,” and names Jani Lainema as inventor.
27 43. The ’211 patent issued on March 23, 2004, from an application filed May 8, 2000.
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6 THE ’268 PATENT
7 46. U.S. Patent No. 6,879,268 (“the ’268 patent”) is titled “Adaptive Variable Length
8 Coding of Digital Video,” and names Marta Karczewicz as inventor.
14 49. The ’268 patent issued on April 12, 2005, from an application filed July 29, 2003,
15 and claims priority to an application filed on January 22, 2002.
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3 55. The ’502 patent issued on October 11, 2005, from an application filed February 3,
4 2004, and claims priority to an application filed on May 8, 2000.
11 58. U.S. Patent No. 7,082,450 (“the ’450 patent”) is titled “Implementation of a
12 Transform and of a Subsequent Quantization,” and names Antti Hallapuro and Kim Simelius as
13 inventors.
19 61. The ’450 patent issued on July 25, 2006, from an application filed August 30, 2001.
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6 67. The ’456 patent issued on April 17, 2007, from an application filed November 26,
7 2002, and claims priority to an application filed on November 27, 2001.
14 70. U.S. Patent No. 7,289,674 (“the ’674 patent”) is titled “Spatial Prediction Based
15 Intra Coding,” and names Marta Karczewicz as inventor.
21 73. The ’674 patent issued on October 30, 2007, from an application filed June 10,
22 2003, and claims priority to an application filed on June 11, 2002.
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1 THE ’001 PATENT
2 76. U.S. Patent No. 7,302,001 (“the ’001 patent”) is titled “Random Access Points in
3 Video Coding,” and names Ye-Kui Wang and Miska Hannuksela as inventors.
9 79. The ’001 patent issued on November 27, 2007, from an application filed April 28,
10 2003, and claims priority to an application filed on April 29, 2002.
17 82. U.S. Patent No. 7,403,660 (“the ’660 patent”) is titled “Encoding Picture
18 Arrangement Parameter in Picture Bitstream,” and names Miska Hannuksela as inventor.
24 85. The ’660 patent issued on July 22, 2008, from an application filed April 30, 2003.
27
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4 THE ’447 PATENT
5 88. U.S. Patent No. 7,706,447 (“the ’447 patent”) is titled “Switching Between
6 Bitstreams in Video Transmission,” and names Marta Karczewicz and Ragip Kurcenen as
7 inventors.
13 91. The ’447 patent issued on April 27, 2010, from an application filed January 3, 2002,
22 Miska Hannuksela and Kerem Caglar as inventors.
28
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Case No. COMPLAINT
1 97. The ’052 patent issued on May 4, 2010, from an application filed May 15, 2001, and
2 claims priority to an application filed on May 15, 2000.

8 THE ’473 PATENT
16 103. The ’473 patent issued on July 6, 2010, from an application filed May 2, 2002, and
17 claims priority to an application filed on May 15, 2000.
24 106. U.S. Patent No. 7,826,531 (“the ’531 patent”) is titled “Indicating Regions Within a
25 Frame,” and names Ye-Kui Wang and Miska Hannuksela as inventors.
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3 109. The ’531 patent issued on November 2, 2010, from an application filed January 19,
4 2006, and claims priority to an application filed on April 29, 2002.
11 112. U.S. Patent No. 8,005,145 (“the ’145 patent”) is titled “Method and Apparatus for
12 Transferring Video Frame in Telecommunication System,” and names Jani Lainema as inventor.
18 115. The ’145 patent issued on August 23, 2011, from an application filed July 6, 2004,
19 and claims priority to an application filed on August 11, 2000.
26 118. U.S. Patent No. 8,050,321 (“the ’321 patent”) is titled “Grouping of Image Frames
27 in Video Coding,” and names Miska Hannuksela as inventor.
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5 121. The ’321 patent issued on November 1, 2011, from an application filed January 25,
6 2006, and claims priority to an application filed on January 23, 2002.
13 124. U.S. Patent No. 8,107,539 (“the ’539 patent”) is titled “Method for Error
14 Concealment in Video Sequences,” and names Miska Hannuksela and Ye-Kui Wang as inventors.
20 127. The ’539 patent issued on January 31, 2012, from an application filed July 15, 2003,
21 and claims priority to an application filed on July 15, 2002.
27
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Case No. COMPLAINT
1 THE ’744 PATENT
2 130. U.S. Patent No. 8,107,744 (“the ’744 patent”) is titled “Picture Buffering for
3 Prediction References and Display,” and names Dong Tian, Miska Hannuksela, and Ye-Kui Wang
4 as inventors.
10 133. The ’744 patent issued on January 31, 2012, from an application filed November 6,
11 2003, and claims priority to an application filed on December 3, 2002.
18 136. U.S. Patent No. 8,204,134 (“the ’134 patent”) is titled “Grouping of Image Frames
19 in Video Coding,” and names Miska Hannuksela as inventor.
25 139. The ’134 patent issued on June 19, 2012, from an application filed January 25, 2006,
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4 THE ’863 PATENT
12 145. The ’863 patent issued on February 18, 2014, from an application filed April 6,
13 2005, and claims priority to an application filed on July 19, 1999.
19 COUNT I: BREACH OF CONTRACT
20 148. Lenovo United States repeats and realleges the allegations in the foregoing
21 Paragraphs as if set forth fully herein.
22 149. At all relevant times, Nokia Corporation had a contractual duty under the ITU’s
23 Patent Policy to disclose any patent rights that might be essential to the H.264 standard before the
24 standard was frozen. As assignee of the Nokia Patents, Nokia Oy is bound by the contractual
25 commitments that Nokia Corporation owed under the ITU’s Patent Policy, and is successor-in-
26 interest with respect to Nokia Corporation’s rights and obligations arising under that Policy,
27 including with respect to the obligation to disclose any allegedly essential patents rights before the
28 H.264 standard was frozen.
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Case No. COMPLAINT
1 150. During development of the H.264 standard, Nokia Corporation employees attended
2 meetings and submitted proposals for technology to be included in the H.264 standard. However,
3 at no time during that process did Nokia Corporation disclose that it had previously filed patent
4 applications to which the Nokia Patents claim priority. Rather, only after the H.264 standard was
5 frozen did Nokia Corporation and/or Nokia Oy first claim that the Nokia Patents are essential to
6 the standard. This late disclosure breached Nokia Corporation’s contractual duty under the Patent
7 Policy, and Nokia Oy now stands in Nokia Corporation’s shoes with respect to these breaches.
8 151. Lenovo and others relied on the ITU’s Patent Policy, and reasonably expected that
9 ITU participants and their successors-in-interest, including Nokia Corporation and/or Nokia Oy,
10 had complied with all aspects of that Policy during development of the H.264 standard.
11 152. Every party making, using, selling, offering for sale, and/or importing products that
12 support aspects of the H.264 standard, including Lenovo United States, is an intended third-party
13 beneficiary of Nokia Corporation’s and/or Nokia Oy’s contractual commitments under the ITU’s
14 Patent Policy, including the requirement for members to timely to disclose any allegedly essential
15 patent rights before the H.264 standard was frozen.
16 153. As a direct, proximate, and foreseeable result of Nokia Corporation’s and/or Nokia
17 Oy’s breach of the ITU Patent Policy with respect to late disclosure of each of the Nokia Patents,
18 as alleged above, Lenovo United States has suffered harm, both as a customer and as a supplier of
19 downstream products. This harm includes, among other things, being forced to defend against
20 Nokia Oy’s claims that it is entitled to royalties based on patents that are allegedly essential to the
21 H.264 standard but that were not timely disclosed in violation of the ITU’s Patent Policy—and
22 therefore for which Nokia Oy is not entitled to claim any royalties. The harm to Lenovo also
23 includes being threatened with increased costs, loss of profits, loss of customers and potential
24 customers, loss of goodwill and product image, uncertainty in business planning, and uncertainty
25 among customers and potential customers as a result of Nokia Oy’s allegations.
26 COUNT II: VIOLATION OF CALIFORNIA UNFAIR COMPETITION LAW
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Case No. COMPLAINT
1 155. By the acts alleged, Nokia Corporation and/or Nokia Oy have engaged in unlawful,
2 unfair, and/or fraudulent business acts or practices within the meaning of the California Unfair
3 Competition Law, Business and Professions Code (“UCL”) §§ 17200 et seq. The UCL prohibits,
4 among other things, practices that offend established public policy or are unethical, oppressive,
5 unscrupulous, or substantially injurious to consumers. The UCL likewise prohibits deceptive
6 business practices.
7 156. Nokia Corporation and/or its successor-in-interest Nokia Oy committed such
8 wrongful actions at least by engaging in a pattern of failing to timely disclose any of the Nokia
9 Patents during development of the H.264 standard, despite a contractual obligation to do so—all
10 while actively participating in the H.264 standard-setting process. Nokia Corporation submitted
11 proposals for technology to be included in the H.264 standard, while separately filing the
12 applications leading to the Nokia Patents, and without declaring any of the Nokia Patents as
13 allegedly essential to the H.264 standard before the standard was frozen. Nokia Corporation
14 and/or Nokia Oy then later claimed that the Nokia Patents are essential to practice that standard.
15 157. Nokia Corporation and Nokia Oy’s pattern of behavior violated the rules of the
16 H.264 standard-setting organizations and unfairly and deceptively prevented those organizations
17 from fully evaluating relevant technologies under consideration when developing the H.264
18 standard. Due to that late disclosure, industry participants became “locked in” to use the
19 standardized functionality that Nokia Oy now claims is covered by the Nokia Patents, but without
20 the benefit of considering those patent rights during development of the standard (which, among
21 other things, upon information and belief, would have resulted in the selection of a competing
22 technology or elimination of the functionality altogether).
23 158. Lenovo and others relied on the ITU’s Patent Policy, and reasonably expected that
24 ITU participants, including Nokia Corporation and/or its successor-in-interest Nokia Oy, had
25 complied with all aspects of that Policy during development of the H.264 standard.
26 159. As assignee of the Nokia Patents, which were assigned to Nokia Corporation during
27 the development of the H.264 standard, Nokia Oy is successor-in-interest to Nokia Corporation’s
28
-22-
Case No. COMPLAINT
1 obligations as a participant in development of the H.264 standard and to Nokia Corporation’s
2 rights and obligations arising under the ITU Patent Policy with respect to the Nokia Patents.
3 160. Nokia Oy has demanded licensing fees for the Nokia Patents that were not timely
4 disclosed in contravention of the ITU’s Patent Policy (and thus, for which Nokia Oy is not entitled
5 to collect any royalties based on alleged practice of the H.264 standard). Nokia Oy’s patent
6 monetization conduct with respect to the Nokia Patents is based on the assertion of allegedly
7 essential patents that were not disclosed to the ITU before the H.264 standard was frozen, and for
8 which Nokia Oy now seeks excessive, supra-RAND royalties including because Nokia Oy is not
9 entitled to collect any royalties from Lenovo United States on these untimely disclosed patents.
10 161. As a direct, proximate, and foreseeable result of Nokia Corporation and Nokia Oy’s
11 unfair, deceptive, and wrongful conduct, as alleged above, Lenovo United States has suffered
12 harm, both as a customer and as a supplier of downstream products. This harm includes, among
13 other things, suffering or being threatened with increased costs, loss of profits, loss of customers
14 and potential customers, loss of goodwill and product image, uncertainty in business planning, and
15 uncertainty among customers and potential customers.
16 162. The harm from Nokia Corporation and Nokia Oy’s wrongful conduct also includes
17 harm to the public and/or to competition in the form of lack of adoption of alternative
18 technologies, higher prices and reduced innovation and quality for U.S. consumers purchasing
19 products that support the H.264 standard, undermining the procompetitive aspects of standard
20 setting processes, and chilling incentives to participate in beneficial standard setting processes.
21 Unless such wrongful conduct is enjoined, Lenovo and the public will continue to suffer
22 irreparable harm as a result of this wrongful conduct.
23 COUNT III: DECLARATORY JUDGMENT OF UNENFORCEABILITY
26 164. At all relevant times, Nokia Corporation and/or its successor-in-interest Nokia Oy
27 had a contractual duty under the ITU’s Patent Policy to disclose patent rights that might be
28 essential to the H.264 standard.
-23-
Case No. COMPLAINT
1 165. During development of the H.264 standard, Nokia Corporation employees attended
2 meetings and submitted proposals for technology to be included in the H.264 standard. However,
3 at no time before the H.264 standard was frozen did Nokia Corporation disclose that it had already
4 filed patent applications to which the Nokia Patents claim priority. This late disclosure breached
5 the contractual duty that Nokia Corporation and/or its successor-in-interest Nokia Oy owed under
6 the ITU’s Patent Policy.
7 166. Nokia Corporation and/or Nokia Oy’s repeated failure to disclose rights in the Nokia
8 Patents to the ITU—for years after the H.264 standard was frozen, if at all—is part of a pattern of
9
egregious behavior that prevented the ITU and other SSO members from fully evaluating the
10
relevant technologies when developing the H.264 standard. Upon information and belief, had the
11
Nokia Patents been timely disclosed during the standard-setting process, members would have
12
13 decided to standardize an alternative technology or left the relevant technology out of the
14 standard. The failure to disclose each of the Nokia Patents in a timely fashion distorted and
15 impaired the standardization process in an egregious way.

16 167. Nokia Corporation and Nokia Oy also unjustly benefitted from this late disclosure.
17
For example, Nokia Oy now claims that each of the Nokia Patents is essential to practice the
18
H.264 standard, even though Nokia Corporation and/or Nokia Oy deprived ITU members of the
19
ability to consider non-patented alternatives or to eliminate the functionality from the standard that
20
21 Nokia now claims is covered by the Nokia Patents, such that the accused functionality would not
22 have been included in the H.264 standard but for the lack of timely disclosure. Nokia Oy and/or
23 Nokia Corporation also have unjustly benefited from this late disclosure by demanding and
24
obtaining licensing revenue based on the allegedly standards-essential nature of the Nokia Patents,
25
by claiming enhanced value to investors and others through an inflated sense of its patent portfolio
26
(which includes the Nokia Patents), and by relying on the allegedly standard-essential nature of
27
the Nokia Patents to accuse Lenovo United States (and others) of infringing the Nokia Patents.
28
-24-
Case No. COMPLAINT
1 168. As assignee of the Nokia Patents, which were assigned to Nokia Corporation during
2 the development of the H.264 standard, Nokia Oy is successor-in-interest to Nokia Corporation’s

3
obligations as a participant in development of the H.264 standard and to Nokia Corporation’s
4
rights and obligations arising under the ITU Patent Policy with respect to the Nokia Patents.
5
169. In light of their conduct, Nokia Corporation and Nokia Oy impliedly waived the
6
right to assert the Nokia Patents against anyone practicing the H.264 standard. Therefore, Lenovo
7
United States is entitled to a declaratory judgment that the Nokia Patents are unenforceable against
8
the H.264 standard.
9
DAMAGES
10
170. As a result of Nokia Corporation and Nokia Oy’s acts of misconduct, Lenovo United
11
States has suffered and continues to suffer actual and consequential damages. However, Lenovo
12
United States does not yet know the full amount of damages, which will be ascertained through
13
discovery and special accounting. To the fullest extent permitted by law, Lenovo United States
14
seeks recovery of damages at least sufficient to make Lenovo United States whole for the harm
15
caused by Nokia Corporation and Nokia Oy. Lenovo United States further seeks any other
16
damages to which Lenovo United States is entitled under law or in equity.
17
PRAYER FOR RELIEF
18
Wherefore, Lenovo United States respectfully requests that the Court grant the following
19
relief:
20
A. Enter judgment in favor of Lenovo United States and against Nokia Oy;
21
22 B. Adjudge and decree that each of the Nokia Patents is unenforceable against
23 anyone practicing the H.264 standard or otherwise making, using, selling,
24 offering of sale, or importing products supporting the H.264 standard

25
because Nokia Corporation and/or Nokia Oy breached the ITU’s Patent
26
Policy;
27
28
-25-
Case No. COMPLAINT
1 C. Adjudge and decree that each of the Nokia Patents is unenforceable against
2 anyone practicing the H.264 standard or making, using, selling, offering for
3
sale, or importing products supporting the H.264 standard because Nokia
4
Corporation and/or Nokia Oy have engaged in unfair business acts and
5
practices in violation of California law;
6
D. Adjudge and decree that the Nokia Patents are unenforceable against anyone
7
8 practicing the H.264 standard or making, using, selling, offering of sale, or
9 importing products supporting the H.264 standard under the doctrine of

10 implied waiver;
11
E. Enjoin enforcement of the Nokia Patents against anyone practicing the H.264
12
standard or making, using, selling, offering for sale, or importing products
13
supporting the H.264 standard;
14
15 F. Award Lenovo United States the amount of damages it proves at trial;
16 G. Award Lenovo Unites States all reasonable attorney fees and costs, including
17 pursuant to the California Civil Procedure Code § 1021.5;

18 H. Award taxable costs;
19
I. Award interest; and
20
J. Award Lenovo United States other and further relief as this Court deems just
21
and proper.
22
23 JURY TRIAL DEMAND
24 Lenovo United States hereby demands a jury trial pursuant to Rule 38 of the Federal Rules
25 of Civil Procedure as to all issues so triable.

26
27
28
-26-
Case No. COMPLAINT
1 Dated: December 7, 2020
2 Respectfully submitted,
3 /s/ Joseph F. Haag
Joseph F. Haag (SBN 248749)
4
WILMER CUTLER PICKERING
5 HALE AND DORR LLP
2600 El Camino Real, Suite 400
6 Palo Alto, CA 94306
Telephone: (650) 858-6000
7 Facsimile: (650) 858-6100
8 Joseph.Haag@wilmerhale.com
9 William F. Lee (pro hac vice forthcoming)

Richard W. O’Neill (pro hac vice pending)
10 WILMER CUTLER PICKERING
HALE AND DORR LLP
11 60 State Street
12 Boston, MA 02109
Telephone: (617) 526-6000
13 Facsimile: (617) 526-5000
William.Lee@wilmerhale.com
14 Richard.O’Neill@wilmerhale.com
15
16
17
18
19
20
21
22
23
24
25
26
27
28
-27-
Case No. COMPLAINT

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Case 5:20-cv-08650 Document 1 Filed 12/07/20 Page 1 of 27

9 UNITED STATES DISTRICT COURT

1 4. On information and belief, Defendant Nokia Oy is a Finnish corporation that is

2 headquartered in and does business in Sunnyvale, California.1 Nokia Oy claims to own by

2 practice certain aspects of the H.264 standard.

1 THE ’001 PATENT

2 claims priority to an application filed on May 15, 2000.

2 development of the H.264 standard, Nokia Oy is successor-in-interest to Nokia Corporation’s

1 THE ’744 PATENT

1 obligations as a participant in development of the H.264 standard and to Nokia Corporation’s

15 impaired the standardization process in an egregious way.

2 the development of the H.264 standard, Nokia Oy is successor-in-interest to Nokia Corporation’s

23 anyone practicing the H.264 standard or otherwise making, using, selling,

24 offering of sale, or importing products supporting the H.264 standard

8 practicing the H.264 standard or making, using, selling, offering of sale, or

9 importing products supporting the H.264 standard under the doctrine of

15 F. Award Lenovo United States the amount of damages it proves at trial;

17 pursuant to the California Civil Procedure Code § 1021.5;

23 JURY TRIAL DEMAND

25 of Civil Procedure as to all issues so triable.

1 Dated: December 7, 2020

9 William F. Lee (pro hac vice forthcoming)

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